BEREC REPORT ON IMPACT OF FIXED-MOBILE ... - berec - Europa

Questionnaire results
BoR (11) 54
The questionnaire results show that the ‘hypothetical monopolist test’ is a relevant tool
for assessing FMS.A significant number of NRAs have already used this test within
retail market definition for both broadband and voice. Historic data about switching
between fixed and mobile services, reasons for future switching and barriers to
switching are also generally considered important. More NRAs appear to have
considered these three factors in voice rather than broadband retail market definition. A
comparison of contract duration between fixed and mobile services is generally
considered less important – a significant minority of NRAs considered this factor is not
applicable for an assessment of FMS.
6.7. Terminal equipment differences
In general terms, the potential substitutability between fixed and mobile services can be
dictated to a large extent by the differences in price and in functionality of terminal
equipments. For example, for cost-conscious customers, a significant price difference
between fixed line handsets and mobile handsets may be a key decision making factor
if the use to which both types of handsets are put are similar. Furthermore significant
subsidies made by network operators for terminal equipment may affect the end users
decision to switch from fixed line to mobile access or vice versa.
In other words, if consumers only make voice calls and do not require the mobility that
mobile handsets provide, there may be limited substitution between cheaper fixed line
handsets and more expensive mobile handsets. Equally, if consumers have
preferences to use their mobile handsets for more than simple voice calls (i.e. using a
“smartphone” for emails, social networking etc), this is likely to reduce the
substitutability of those mobile handsets with fixed line handsets.
The above example shows that the existence of price differences is not the only factor
that NRAs should look at. Various others factors may exist that are relevant to a
consumers decision as to what type of fixed/mobile handset to purchase. In this regard,
non-price factors can play a part such as a consumer’s affinity to certain
gadgets/equipment (e.g. iPhones) or the possibility to send SMS (which means a
strong preference for mobile access). It may also be important to consider fixed access
within a household as the focal point of family communication whereas mobile devices
would be individually linked to each family member (i.e. it is quite unusual that parents
and their children share the same mobile phone).
On the other hand, the number of houses with multiple computers does not seem, in
general, a very important parameter for this analysis (see below questionnaire results).
38